NBN shielded from audit move

NBN Co, the company charged with building the government’s $35.9 billion broadband network, has been shielded from the full force of sweeping new investigative powers for the Auditor-General.

But private companies that provide services to the federal government could have to open their accounts to the Australian National Audit Office.

Auditor-General
Ian McPhee
was to be given the power independently to initiate performance audits into federally funded programs delivered by the federal, state and territory governments, private contractors and government-owned enterprises.

The changes were recommended by the Parliament’s joint committee of public accounts and audit.

Contractors involved in botched programs, such as the home insulation and controversial school halls schemes, could be audited under the changes passed two weeks ago.

But the Gillard government made a deal in September with the chairman of the committee, independent
Rob Oakeshott
, to pass his draft law giving greater powers to the Auditor-General in return for protecting ­government-owned businesses, such as NBN Co, Medibank Private, ­Aust­ralia Post, Defence Housing Aust­ralia, Australian Railtrack Corporation and submarine-builder ASC, from audits initiated by the Auditor-General of his own volition.

Now the Auditor-General can ­“follow the money trail" through these businesses only after obtaining permission from the government-dominated joint committee of public accounts and audit.

“On the government’s side, their compromise was that a minister no longer had to give approval [for an audit] so I accepted that because they weren’t going to budge, so I gave up and accepted it [the government’s amendment]," Mr Oakeshott told The Australian Financial Review.

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Mr Oakeshott said the government had not told him why it insisted on the late change.

“It’s a good question and we’ve just been left to try and guess," he said.

“Maybe it’s the early days of the NBN or it could be the large ­dividends from government ­corporations."

Opposition spokeswoman
Bronwyn Bishop
said the new law was the first time a government auditor has had the power to investigate a private company.

“It’s quite improper," Ms Bishop said.

Large defence contractors, such as BA Systems, Thales Australia, and Lockheed Martin, could be among the private businesses liable for an extra layer of scrutiny from the ­Auditor-General, who will now be able to publish an audit opinion about the companies’ performance in delivering government programs.

Other large government consulting firms, such as Accenture, PwC and Deloitte, may have to open their books to government auditors who are trying to follow the trail of taxpayer funds through government agencies and into the private sector.

Ms Bishop said the opposition was “perfectly happy" to support giving new powers to the Auditor-General to track the spending of federal funds through federal government agencies, government-owned businesses and state governments.

The Coalition opposed any move to allow the Auditor-General to open the books of private companies because it would increase compliance costs for business. “Instead the government did a total reversal to protect government-owned businesses but the private sector can now be audited," Ms Bishop said.

“It’s made a joke of the public accounts and audit committee and it’s made a joke of Mr Oakeshott’s chairmanship of it."

Ms Bishop said the Coalition would repeal the laws allowing government auditors to audit the books of private businesses.